european-stock-options

Learning objectives: Identify the six factors that affect an option’s price. Identify and compute upper and lower bounds for option prices on non-dividend and dividend paying stocks. Explain put-call parity and apply it to the valuation of European and American stock options, with dividends and...

Learning objectives: Explain put-call parity and apply it to the valuation of European and American stock options. Explain the early exercise features of American call and put options. Questions: 726.1. The price of a dividend-paying stock is $44.00 while the riskfree rate is 3.0%. Consider a...